WEBVTT - Liberty Media CEO Derek Chang

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. I am here with

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<v Speaker 1>Derek Chang. He is the CEO of Liberty Media, also

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<v Speaker 1>sitting on the board of the Oversight. Liberty Media is

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<v Speaker 1>of subsidiary that oversees Live Nation. Derek, thank you so

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<v Speaker 1>much for being here. Really appreciate it.

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<v Speaker 2>Lisa, thanks for having me.

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<v Speaker 1>So I want to start with the idea that everyone

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<v Speaker 1>here is talking about scale, getting enough scale, merging up,

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<v Speaker 1>particularly in the media space. You moved in the opposite

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<v Speaker 1>direction last year, breaking up into a host of different entities.

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<v Speaker 1>Can you talk about why you decided to do that.

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<v Speaker 2>Well. I think if you look at Liberty Media over

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<v Speaker 2>this history, it's had a history of sort of expansion contraction.

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<v Speaker 2>You know, we kind of go with the flow a

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<v Speaker 2>little bit depending on on what the circumstances are and

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<v Speaker 2>what the market is is, you know, asking for and

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<v Speaker 2>what we think that we should be doing for our shareholders.

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<v Speaker 2>So I don't think in this particular moment it was

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<v Speaker 2>a specific strategy of we're ultimately going on a trail

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<v Speaker 2>of sort of getting smaller. It was clarifying and simplifying

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<v Speaker 2>the structures and so delivering two shareholders sort of what

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<v Speaker 2>assets they want in what places at this particular moment.

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<v Speaker 2>But you know, over time, we have had tracking stocks,

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<v Speaker 2>we have spun out companies, and now we're sort of

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<v Speaker 2>back to a more simplified structure, and it's really it'll

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<v Speaker 2>provide that clarity for shareholders.

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<v Speaker 1>So you oversee, your two main properties at Liberty Media

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<v Speaker 1>are Formula one and Moto GP, which is relatively new

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<v Speaker 1>in the US, very big in Europe and Southeast Asia.

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<v Speaker 1>I'm just wondering how you're thinking about a media strategy.

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<v Speaker 1>Just signed this five year deal with Apple in terms

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<v Speaker 1>of streaming rights, is it the same between streaming and

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<v Speaker 1>legacy cable networks? Is it sort of all the same

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<v Speaker 1>at this point when it comes to sports licensing, Well,

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<v Speaker 1>I think.

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<v Speaker 2>It still depends on market, on what markets you're actually in,

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<v Speaker 2>and so in a lot of markets like the US,

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<v Speaker 2>at this point, the streamers have a you know, you

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<v Speaker 2>just spoke about scale, a lot of scale, and I

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<v Speaker 2>think that historically people have said, oh, you've got to

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<v Speaker 2>be on a broadcast network, otherwise you're not going to

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<v Speaker 2>have the reach. I don't think that's true anymore. And

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<v Speaker 2>I think the deal that we did with Apple basically

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<v Speaker 2>has shown that that is, you know, for US, Apple

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<v Speaker 2>has We've seen no real drop off in terms of viewership,

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<v Speaker 2>and in fact, engagement overall is higher than it was

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<v Speaker 2>before in the early sort of going here the first

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<v Speaker 2>three or four races that we've had this year. And

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<v Speaker 2>I think what that speaks to is streaming platforms, certainly

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<v Speaker 2>in the US have reached a level of maturity and

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<v Speaker 2>even beyond you'd say, and you see it right now

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<v Speaker 2>with sort of what's gone on at the NFL. There

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<v Speaker 2>are recent deals that they're doing, so clearly it's part

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<v Speaker 2>of sort of mainstream viewing habits and this whole concept

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<v Speaker 2>I think that people with the knock on streaming was

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<v Speaker 2>also you don't you lose sort of the sampling effect.

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<v Speaker 2>And I think what you see with our deal with

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<v Speaker 2>Apple is is that people sample in different ways. We

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<v Speaker 2>go into an Apple store, or you watch other content

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<v Speaker 2>that's on Apple TV or Apple Music, or what they

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<v Speaker 2>do with Apple Maps, which they did in the Miami

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<v Speaker 2>Race where they sort of created and a you know,

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<v Speaker 2>integrated into Apple Maps with stuff around the Miami Race

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<v Speaker 2>and the had special content for that race. So you've

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<v Speaker 2>got platforms now that because of the technology they have,

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<v Speaker 2>because of their sort of an Apple Scace singular focus

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<v Speaker 2>on Formula one, the ability to actually expand your audiences

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<v Speaker 2>in different ways than you ever have.

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<v Speaker 1>Do you think that you're going to move to a

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<v Speaker 1>Netflix type of model that you did with F one

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<v Speaker 1>when it comes to MotoGP in the US, where you

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<v Speaker 1>have a TV series about it, you sort of broadcast

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<v Speaker 1>it to popular consumption in a way to democratize exactly

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<v Speaker 1>what it is.

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<v Speaker 2>Well, I think what you're going to see with Moto

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<v Speaker 2>GP is a lot of what we did with Formula one.

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<v Speaker 2>There will be similar applications of that. So the biggest

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<v Speaker 2>thing for us with MotoGP is how do you take

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<v Speaker 2>the sport which at its core is a very pure

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<v Speaker 2>sport and a huge, you know, passionate fan base, and

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<v Speaker 2>how do you expand that? How do you get more

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<v Speaker 2>people engage, whether it's in the US or worldwide? And

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<v Speaker 2>I think you do that by telling the story and

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<v Speaker 2>we haven't told MotoGP, has never really told that story.

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<v Speaker 2>And you do that through writers, You do that through

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<v Speaker 2>the action on the track, and you do that sort

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<v Speaker 2>of in multiple ways, through content, through fan activation at races,

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<v Speaker 2>through the licensing partners, and the sponsorship partners that you have,

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<v Speaker 2>But I do think the content piece of this is

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<v Speaker 2>a very important part. Whether you do a show just

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<v Speaker 2>like Drive to Survive, I don't know if that's necessarily

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<v Speaker 2>going to happen because it's a different sport and you

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<v Speaker 2>want to remain authentic to your fan base and to

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<v Speaker 2>the fans that you're trying to attract. So we will

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<v Speaker 2>figure out things that we can do in and around

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<v Speaker 2>Moto GP that sort of creates the same impact, and

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<v Speaker 2>making it available and making it accessible to as broad

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<v Speaker 2>a fan base as possible.

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<v Speaker 1>You also help to oversee Live Nation. The Live Nation

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<v Speaker 1>investment is through the Liberty Board. And I'm curious from

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<v Speaker 1>your perspective, take a price to really expensive. Everyone talks about,

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<v Speaker 1>everyone complains about it that the inflation in ticket prices

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<v Speaker 1>to go see events is incredibly high, and then they

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<v Speaker 1>still go, how do you understand the inflation at ticket

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<v Speaker 1>prices whether it's World Cup and what's going on there,

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<v Speaker 1>or whether it's basketball at Madison Square Garden and understand

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<v Speaker 1>what's the right pricing? How do you do that strategy?

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<v Speaker 2>Well, the reality is it's it is simple supply and demand, right,

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<v Speaker 2>And so I think what you're seeing is a huge

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<v Speaker 2>demand for live entertainment, live events, and you know, I

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<v Speaker 2>see this through the Formula one lens where our paddock

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<v Speaker 2>club is for the most part sold out through the

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<v Speaker 2>through the rest of the year here or club, that's

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<v Speaker 2>the high end, you know, ticket tickets and hospitality that

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<v Speaker 2>we offer, and I think there's just so much demand

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<v Speaker 2>for these sorts of experiences that the reality is you

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<v Speaker 2>could probably you know, create multiples of availability and it's

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<v Speaker 2>still going to l I don't know about you know,

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<v Speaker 2>the specific has been specific ticket pricing strategy for those,

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<v Speaker 2>but I think ultimately what you're speaking to is there's

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<v Speaker 2>just this demand sent up demand for live entertainment that

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<v Speaker 2>you know, you continue to see despite the fact that

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<v Speaker 2>there are a lot of different things that people can

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<v Speaker 2>go to. But I think that see allure of that

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<v Speaker 2>and the appeal and for different people, it's different reasons, right.

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<v Speaker 2>Some people go specifically for the racing, Some people go

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<v Speaker 2>for the racing and for the food, some people go

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<v Speaker 2>for the racing end, for the celebrities, whatever it is,

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<v Speaker 2>there's this just attraction to it, and I think we're

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<v Speaker 2>bringing that to the fans.

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<v Speaker 1>Derek Chang, thank you so much for being with US

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<v Speaker 1>Derek Tang, CEO of Livery Media,